Required: 1. Compute the company's average operating assets for last year. 2. Compute the company's margin, turnover, and return on investment (ROI) for last year. (Hint: Should you use net income or net operating income in your calculations?) 3. What was the company's residual income last year?
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- Problem 11-17 (Algo) Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc.Balance Sheet BeginningBalance EndingBalance Assets Cash $ 138,000 $ 134,000 Accounts receivable 342,000 483,000 Inventory 580,000 473,000 Plant and equipment, net 810,000 820,000 Investment in Buisson, S.A. 400,000 435,000 Land (undeveloped) 248,000 250,000 Total assets $ 2,518,000 $ 2,595,000 Liabilities and Stockholders' Equity Accounts payable $ 375,000 $ 340,000 Long-term debt 1,046,000 1,046,000 Stockholders' equity 1,097,000 1,209,000 Total liabilities and stockholders' equity $ 2,518,000 $ 2,595,000 Joel de Paris, Inc.Income Statement Sales $ 5,103,000 Operating expenses 4,235,490 Net operating income 867,510 Interest and taxes:…Exercise 11-9 (Algo) Return on Investment (ROI) and Residual Income Relations [LO11-1, LO11-2] Supply the missing data for three service companies shown in the table below. Note: Loss amounts should be Indicated by a minus sign. Round your percentage answers to nearest whole percent. Sales Net operating income Average operating assets Return on investment (RO Minimum required rate of return. Percentage Dollar amount Residual income A Company B C S 9,240,000 S 7.400.000 S 306,000 $ 4,880.000 S 3,080,000 S 1,944.000 15 % 18 % 96 13 % 96 S 340,000 18 96 $ 97.200eBook Determining missing items in return on investment and residual income computations The following table presents various rates of return on investment and residual incomes: InvestedAssets OperatingIncome Return onInvestment MinimumRate ofReturn MinimumAcceptableOperatingIncome ResidualIncome $980,000 $215,600 (a) 12% (b) (c) 520,000 (d) (e) (f) $62,400 $20,800 320,000 (g) 14% (h) 35,200 (i) 240,000 50,400 (j) 12% (k) (l) Determine the missing items, identifying each item by the appropriate letter. Round dollar amounts to the nearest whole number. Answer a. fill in the blank 1 % b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5 % f. fill in the blank 6 % g. $fill in the blank 7 h. fill in the blank 8 % i. $fill in the blank 9 j. fill in the blank 10 % k. $fill in the blank 11 l. $fill in the blank 12
- Determining missing items in return on investment computation One item is omitted from each of the following computations of the return on investment: Return on Investment = Profit Margin x Investment Turnover 24 % = 10 % x (a) (b) = 24 % x 0.75 12 % = (c) x 1.5 16 % = 20 % x (d) (e) = 15 % x 2.2a. Prepare a vertical analysls percents as whole numbers. Versatile Company Income Statements For the Years Ended December 31 20Y5 20Y5 Percent 20Y4 20Y4 Percent Amount Amount Fees earned $793,000 100 % $672,000 100 % Operating expenses 650,260 81 % 591,360 86 % Income from $142,740 19 % $80,640 14 % operations b. Does the vertical analysis indicate a favorable or an unfavorable trend?Using the information calculate ROI Income 6,000 Revenue 24,000 Average assets 10,000
- Exercise 11-9 (Algo) Return on Investment (ROI) and Residual Income Relations (LO11-1, LO11-2) A family frend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent.) Company $0.330.000 $7.50.000 $ 4.5.000 Sales Net operating income 317.000 $ 190.000 Average operating sets Ratum on investment (RO0 Minimum required rate of retum Perentage Dolar amount $a10.000 Residual incomeCH11_HW_QA3_LA Required 1: Compute the company’s return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your intermediate calculations and final answer to 2 decimal places.) Margin % Turnover ROI % Required 2: Using Lean Production, the company is able to reduce the average level of inventory by $95,000. (The released funds are used to pay off short-term creditors.) (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin % Turnover ROI % Required 3: The company achieves a cost savings of $14,000 per year by using less costly materials. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin % Turnover ROI % Required 4: The company issues bonds and uses the proceeds to…Provide the missing data in the following tabulation: Division Alpha Bravo Charlie Revenue 11500000 Operating profit 920000 210000 Average operating assets 800000 Margin 4,00% 7,00% Turnover 5 Return on investment (ROI) 20% 14%
- Q23 Selected data from Box Division's accounting records revealed the following: Sales $ 345,060 Average investment $ 200,100 Net operating income $ 24,300 Minimum rate of return (divisional cost of capital) 11% Box Division's return on sales (ROS) is: (Round your percentages to one decimal place.) Multiple Choice 11.1%. 4.1%. 7.0%. 19.2%. 12.1%.Total annual revenue Total revenue growth rate Terminal revenue growth rate Net operating profit margin (NOPM) Net operating asset turnover (NOAT) Projected total revenue for the following year would be: Select one: O O O $2,850,649 5.0% 2% 8.2% 3.42 a. $2,993,181 b. $2,948,141 c. None of these are correct d. $2,907,662Profit Margin, Investment Turnover, and ROI Cash Company has income from operations of $43,578, invested assets of $269,000, and sales of $726,300. Use the DuPont formula to compute the return on investment. If required, round your answers to two decimal places. a. Profit margin % b. Investment turnover c. Return on investment %